Material management

2. Before MM & After MM
Scope of MM.
Process of MM.
MM Revolves around
5M’s
Why MM is Necessary?
Focus of MM.
Objectives of MM
Main depts. Of MM.
Functions of MM.
a. Production Control
Function (Water Tank
Analogy)
b. Inventory Control
c. Material Handling
Systems
a. JIS
b. SCM
c. WMS
 Challenges for MM
implementation. Q & A Section
 Thank You

3. Before MM

4. The scope of material management varies from company
to company include material planning, organizing and
control, production planning, organizing and control,
purchasing function, inventory control function and
stores/warehouse management function.
ManagementMaterial +
Internal
Operations
Distribution on
Service Points
Purchasing
Materia
l
Management
Control
Organizin
g
Planning

5. Consumpti
on & End
Usage
Issuance &
Distribution
Purchasin
g
Receivin
g
Quality
Control
Warehousi
ng &
Storage
Inventor
y
Control
Productio
n
Start

7. • Smooth the flow of production.
• Reduction in inventories, storage space and handling
cost.
• Saving Labor Time.
• Better utilization of resources.
• Reduction in wastage/damage of material.
• To take advantage of price discounts.
• To meet the demand during the replenishment period.
• To keep pace with changing market conditions.

8. In-Right Quantity
Of-Right Quality
At-Right Time
From-Right Source
At-Right Price

10. Material
Manageme
nt
Material &
Production
Planning &
Control
Procureme
nt
Inventory
Control
Store/
Warehous
e

11. Functions involved in MM
Production
Control
Inventory Control
Material Handling

12. Functions involved in MM (Cont.)
1.Production Control:
The function of production control aims at directing and regulating the movement
of goods through the entire manufacturing cycle.
Department involves in this function are:
a) Purchasing department
b) Receiving department
To acquire the required materials
• In the right quantity
• Of the right quality
• From right source
a) Raw material inventory department
b) Production department
• At the right time
• At right price / cost

13. Advantages-
Centralization
 Bulk Quantity Discount
 Concentrated volume
 Avoid duplication
 Specialization of purchase
team
 Lower transportation costs
 Uniformity in purchasing
policies.
 Common supply baseAdvantages-
Decentralization
 Closer knowledge of
requirements
 Local sourcing
 No heavy investment is
required
 Quick Order placing
Disadvantages-
Centralization
 High initial investment
 Delay in materials from deliveries
to end user.
 Not suitable, if branches are
located at different geographical
locations.
 Defective materials can not be
replaced timely.Disadvantages- Decentralization
 Lose of discount on bulk buying.
 lacks of specialization in purchasing.
 Inappropriate/Duplication in quantity
procured
 Less chances of effective control.
 Lack of proper coordination among
depts.
 Centralized Purchasing- purchasing department located at
the firm’s corporate office makes all the purchasing decisions.
 Decentralized Purchasing- individual, local purchasing
departments, such as plant level, make their own purchasing
decisions.

14. Functions involved in MM (Cont.)

15. Inventory
LevelSupply
Rate
Inventory
Level
Demand
Rate

16. Functions involved in MM (Cont.)

17. Functions involved in MM (Cont.)

18. Functions involved in MM (Cont.)
• Managing material physical
movement through and out of
the firm.
• The primary objectives of the
material handling is to move
material to required location in a
timely and cost effective way.

19. Systems
Just-In-Time
Supply Chain Management
Warehouse Management System

20. Systems (Cont.)

21. Systems (Cont.)

22. Systems (Cont.)

23. Selection
of
appropria
te
vendors.
Difficulty in
forecasting
demand
accurately.
Diversificati
on of
product
lines.
Optimizing
time and
quantity
for the
products
Land and
storage cost
increases
day by day.
Manageme
nt of
information.